Like a Wrecking Ball: The troubling trend of patent decisions continues

I’ve heard that nostalgia peaks about every 20 years, meaning that about now we should all be feeling warm and fuzzy over fond memories of the 1990s. Makes sense, I guess. After all, the '90s brought us the World Wide Web. And MP3 players. A revival of sorts in music and art. And a housing boom of Biblical proportions. Prosperity abounded. But then what happed? After a few years, the new millennium ushered in one of the worse blows to the global economy in history. Housing markets crashed. People lost jobs. People, businesses, even countries, faced bankruptcy. Miley Cyrus entered pop culture.

While admittedly less dramatic, a similar type of cyclical effect appears in the world of intellectual property. My patent practice began in 1998. The policies in place at the Patent Office, the jurisprudence, and even the vibe around the office then matched that of the general goings-on in the world. Companies had money to spend. Loosely defined inventions were getting patents. Life was good for patent owners.

Things started to change, though not quite as suddenly as the housing bubble burst, but they changed nonetheless. Throughout the 2000s, the Supreme Court issued a series of landmark patent decisions designed to reign in what the Justices viewed as patent-system excesses. Notably, the Festo decision precluded equivalent infringement if the patentee amended the originally filed claims, the KSR decision made inventions obvious simply if they could be deemed “predictable,” and the Bilski decision opened the door for categorically denying business method patents as claiming patent ineligible abstract ideas. These decisions had a significant impact on the patent landscape to the detriment of patent owners. Then this year, in what was a remarkably IP-heavy docket, the Supreme Court continued its apparent anti-patent bent by revisiting certain bedrock principles of the U.S. patent system.

The most notable of the recent Supreme Court patent cases is the Alice v. CLS Bank decision, which at its core can be thought of as further constricting the subject matter that is eligible for patent protection. The Alice case involved a number of patents generally directed to schemes for managing settlement risk during financial transactions. The patents involved could be characterized as software and business method patents, which, as noted, have been under attack by the courts (Bilski and others) as claiming patent-ineligible abstract ideas. Even so, claims like those in Alice were generally allowed at the Patent Office (assuming the other requirements were met) provided that they included some type of machine or a tangible transformation of matter. Often, this test was considered satisfied simply through the inclusion of a computer or data-processor hardware in the claim. In Alice, however, the Supreme Court held that reciting a generic computer in software and method claims alone is no longer sufficient to ensure patentable subject matter, and further that the claims must recite some “inventive concept” or “something more” beyond a generic computer in order to convert a patent-ineligible abstract idea into patent-eligible subject matter. Not surprising, the Alice decision lacked useful guidance as to what that an “inventive concept” (or “something more”) might be.

The basic proposition of Alice is not all that surprising given the trend in treatment of software and business method claims. The more notable (and troubling for some patent owners) aspect of the decision is that the patents at issue also included claims to the computer system and “computer-readable medium” (also known as “Beauregard” claims), which, by claiming tangible hardware or software storage devices, previously had been free from the controversy surrounding the patent eligibility of software and business method claims. The Supreme Court, however, concluded that these claims were no different in substance from computer-implemented method claims, and thus all of the claims at issue (method, system and Beauregard) were deemed ineligible for patent protection and invalid.

The recent Nautilus v. Biosig decision, at least ostensibly, heighted the standard that courts use to assess the clarity, and thus the validity, of patent claims. This decision concerned a dispute over the meaning of the claim term “spaced” as pertaining to electrodes of a heart rate monitor in exercise equipment. The legal issue was whether the term was sufficiently well-defined to meet the statutory requirement that the claims be definite by “particularly pointing out and distinctly claiming” the invention. Simply put, the law requires claims to be clearly stated. Yet, despite this well-known statutory requirement, even patent attorneys, the very drafters of patent claims themselves, will acknowledge that patent claims are seldom, if ever, a model of clarity.

Courts had previously considered that patent claim terms met the statutory requirement for definiteness as long as they were not “insolubly ambiguous.” Put another way, unless the claims were hopelessly confounded, they were definite. The Supreme Court overturned this practice and held that claims are invalid as indefinite unless their meaning can be understood with “reasonable certainty.” Putting aside the lack of clarity of the standard itself, this new, objectively tougher standard will make some patent claims easier to invalidate.

Thus, it seems for now that patent owners will continue to face challenging times. So what can you do to ease the pain? To be sure, the long-term impact of these decisions is not yet clear, and much will depend on how the new standards are applied by the Patent Office and the courts. Proactive patent owners, however, should begin changing their approach to prosecution and litigation in certain respects.

For new patent applications, you should be prepared to alter your approach to patent drafting in at least two key aspects. For one thing, would-be patent owners will benefit from a more elaborate specification. The main job of the description and other non-claim sections of the patent application is to support the subject and terminology of the claims. So a good specification has always been important. In light of Nautilus, however, more value is placed on clear explanations of claim terms in the written description. As such, one objective in patent drafting should be to bolster the specification by providing definitions or other specific details (e.g., upper and lower bounds of a term of range) that the courts can use when interpreting the claims during litigation. By calling out and defining key claim terms in the description, drafters can provide courts (and other decision makers) with a clear meaning of the terms to inform claim construction, thereby increasing the likelihood of meeting the “reasonable certainty” standard. Further, definitions included in the written description will be part of the intrinsic record of the patent, which has higher probative value than “extrinsic” sources such as expert testimony at deposition or trial. The goal then is to deprive your opponent, and the court, of a tenable basis for invalidating your patent claims as indefinite.

A second approach to consider is an adjustment to your claiming strategy, especially for software and business method claims. As discussed, simply adding computer hardware to software and method claims will no longer suffice to ensure patent-eligibility. Instead, drafters will be well-advised to seek out ways to introduce improved computer technology into the claims, particularly that which is not part of the basic method alone. Claims combining computerized methods with non-abstract (e.g., industrial) processes for the improvement of those processes may be useful. Also, drafters may consider using markedly different formatting and wording for the system claims compared to the method claims in order to distance the system claims from abstract-idea rejections of the methods. In this vein, avoid the temptation to simply recast software or method claims as system claims by doing a cut and paste operation of the software or method steps into a new claim having a system preamble and a computer hardware element. This is what the patentee did in Alice, which led the Supreme Court to conclude that the method and system claims were the same in substance, and ultimately to introduce bad law for the rest of us to deal with.

Of course, you don't have the luxury of changing claiming strategy or rewriting patents that have already issued, so here are a few ideas to help make the existing patents in your portfolio less vulnerable to invalidity attacks, and thus more enforceable.

In 2011, the America Invents Act was enacted and brought with it new and revised post-grant review procedures. These procedures, along with those previously in effect, give defendants more ways to challenge the validity of a patent. They also can present an opportunity for the patent owner to address certain deficiencies in the issued patent. Here the objective would be to utilize these procedures to improve the issued claims. Re-examination and re-issue proceedings can bolster a patent's strength against anticipation and obviousness challenges, and can also provide a forum to clarify claim meaning through introduction of affidavits and other submissions into the intrinsic record. Other proceedings, such as inter-parties reviews (IPRs), can also provide useful opportunities to clarify, on the record, the meaning of important claim terms. Post-grant proceedings are not risk free, but strategic patent owners may view them as opportunities to bolster or correct the record, with a view towards strengthening patent clarity. Some of these procedures have specific time limitations, and others prescribe what types of issues can be addressed, so you should consult your patent attorney regarding what option is best for your particular situation.

Another thing to consider are your litigation tactics, especially with regard to claim construction and countering a defendant’s indefiniteness contention. Often, conventional wisdom during litigation leads patent owners to seek the broadest interpretation possible for disputed claims. This may be useful, for example, to counter potential non-infringement arguments and even to expand the scope of equivalent infringement. Yet, patent owners should be wary of asking for too much. Seeking a claim construction that supports infringement should be balanced with the need to show reasonable certainty in claim meaning in view of the specification and the rest of the intrinsic record. While this balancing is typically present in any patent litigation, in light of Nautilus, ensuring that the sought after meaning is defined with sufficient specificity will take on heightened importance going forward.

With any luck, altering patent drafting techniques and litigation practices in these and similar ways will help patent owners to carry a stronger patent portfolio into the future. Likely, the reality is that true relief for patent owners may not come until the pendulum swings again. If nostalgia is the guide, that's due to happen any day now. Right? In the meantime, keep counting down the hits.

Steve Wietrzny

Steve Wietrzny (vee-yetch-nee) practices in the area of intellectual property, including patent and trademark prosecution and related IP asset management and enforcement. He focuses on...